The Broken Planet Fallacy

The administration was so excited about this program's economy-stimulating potential that in October 2009 it issued a report titled "Recovery Through Retrofit." Explaining why the government needs to subsidize weatherization, the report noted that "homeowners face high upfront costs" for "retrofits that pay off over long periods of time," and they worry about "recouping the value of their investment if they choose to sell." According to EnergySavvy.com (which promotes retrofitting and therefore has an interest in making it seem worthwhile), spending $25,000 to make a pre-1977 home more energy-efficient might save $1,000 a year in fuel costs, meaning it would take a quarter of a century to recover the investment.

Is it any wonder that homeowners are not leaping at this sort of opportunity? While it's true their calculations may not include the environmental impact of the energy they consume, the Obama administration considers that factor in only the most cursory way. Since it makes no effort to weigh the environmental benefit of retrofitting a home against the cost, it has no way of saying whether the investment makes sense, even taking carbon emissions and global warming into account.

To tip the balance in favor of retrofitting, the administration cites the jobs created by such projects. But if work is not worth doing -- whether it's weatherizing homes or making newfangled solar arrays that prove to be uncompetitive -- the money paid for it is an unjustified cost, not an economy-boosting bonus.

Obama, who bragged about the 3,000 workers who built Solyndra's factory and the 1,000 who were employed there, ignores the possibility of alternative, more productive uses for resources squandered on bad government-subsidized investments. Those uses would create jobs, too, although not ones for which he could take credit.